Morgan Stanley and HSBC have announced the reduction of dozens of employees in the Asia Pacific region this week.

Morgan Stanley and HSBC have made significant job cuts in their investment banking divisions in Asia Pacific due to weak transaction activity and sluggish markets in China and Hong Kong. Morgan Stanley has cut around 13% of its investment banking workforce in Asia, resulting in the departure of at least 50 employees. HSBC is expected to see around 30 people leave its investment banking business unit in the region. These layoffs represent one of the largest reductions in the banks' China-focused investment banking teams and follow similar downsizing moves by other banks in the region. In January, Bank of America laid off 20 bankers in Asia, with similar actions taken by UBS and Citigroup. Neither Morgan Stanley nor HSBC has commented on the job cuts.

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China has expressed strong opposition to President Biden's proposal to increase tariffs on steel and aluminium imports.

The Chinese Ministry of Commerce has strongly condemned the US tariff hikes on Chinese steel and aluminium products. China has vowed to take all necessary measures to protect its rights. US President Joe Biden's call for higher tariffs on Chinese metal products has angered Beijing. A spokesman for China's Ministry of Commerce has urged the US to deal with its own problems, stop raising tariffs on Chinese products and immediately lift the additional tariffs on China. The Biden administration has also threatened to raise tariffs and pressured Mexico to ban indirect sales of Chinese metal products to America. China views such actions as a violation of international economic and trade rules. The Chinese spokesperson warns that US pressure on other countries to restrict Chinese products could have a negative impact on global supply chains and industries.

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The proportion of foreign ownership of China's bond market continues to grow.

Foreign investors continued to invest in Chinese domestic bonds for the seventh consecutive month in March, albeit at a slower pace than in previous months. According to the People's Bank of China, foreign institutions held 4.0 trillion yuan ($552.74 billion) worth of bonds in China's interbank market at the end of March, up slightly from 3.95 trillion yuan in the previous month. However, the 50 billion yuan inflow in March was smaller than in the previous four months and was accompanied by a decline in government bond holdings. Chinese government bonds have performed strongly this year, with long-term bond yields hitting record lows. In addition, the yield gap between 10-year US and Chinese government bonds has widened to 238 basis points, the highest in 22 years, putting pressure on Chinese bond and yuan inflows.

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